The US banks will eventually reload and this might happen sooner rather than later, then the Fed will begin lifting rates. (However I dont expect mortgages to stabilize until 2011/12) If US has been successful in exporting it's financial misery then the global commodity boom is over, at least for the time been. Gold, oil, minerals will drop partially from reduced demand and partially from a stronger dollar. Does this mean that long dollar is the smart play or is there still more misery to come and we wait for one more spike. what are your thoughts? jjf
I don't know about the "one more spike thing", but the mood is all about deflationary pressures now. That means oil, metals, etc. are all headed lower until there's a strong enough catalyst to reverse that feeling. And as we all know, a lower oil and metal price means a stronger dollar.
By "spike" I am referring to the final thrust that is typical of hedgies unwinding and reversing. The aussie is a good example. Will we see the upper 90s again or is it all over and the slide is under way. jjf